In equity markets, returns and market capitalization do not follow a normal distribution. Instead, they exhibit heavy-tailed, right-skewed, power-law characteristics: A very small number of companies account for a very large share of total wealth creation, while many (or even most) companies underperform. At a high level, this is because the potential growth of the biggest companies is "unlimited". A shareholder can make many multiples of their initial investment, while, in the worst case, they have limited liability if a company goes bankrupt and can only lose the amount they initially invested. According to one study , the top ~4% of stocks generate all net long-term wealth creation while the median stock massively underperforms the index. Virtually every investor is familiar with Nvidia

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